Administrative decisions and collateral estoppel

The collateral estoppel (issue preclusion) rule is part of the finality doctrine along with Res Judicata (claim preclusion). It general prevents a party from re-litigating the same issue in a second court. In other words, you don’t get a second bite at the apple in another court simply because you were dissatisfied with the result in the first case. If you’re unhappy with the result in the first case, your remedies are a Motion for Reconsideration, Motion to Set Aside, a Motion for New Trial, appeal, etc. See, generally, Rules 59-60 in Federal Rules of Civil Procedure.

This issue came up in Malloy v. State, 293 Ga. 350 (2013). There, Medicaid instituted a fraud investigation against Tyrone Cecil Malloy, a Georgia gynecologist, for allegedly providing abortion related services and receiving reimbursement through the Medicaid program. After referring the case to the fraud unit, the Program Integrity Unit put a hold on Mallory’s Medicaid payments. Mallory requested a fair hearing. At the fair hearing, the ALJ determined that the record did not support a conclusion that appellant wilfully misrepresented a material fact and thus could not support a finding of fraud or wilful misrepresentation under the Medicaid program. The ALJ ordered that payments not be withheld. Neither side requested reconsideration and neither side appealed to the Commissioner. Thus, the ALJ’s decision became the decision of DCH. See Alexander v. Dep’t of Revenue, 316 Ga. App. 543 (728 SE2d 320) (2012); OCGA § 50-13-17.

Subsequently, in a criminal trial on whther Mallory knowingly took Medicaid funds he was not entitled to receive, Mallory sought dismissal of the charges based on collateral estoppel. Rejecting Mallory argument, the Court first noted administrative decisions are not generally given collateral estoppel effect in subsequent judicial proceedings. It then outlined what is necessary to assert collateral estoppel:

“[A]dministrative decisions may have a collateral estoppel effect in subsequent judicial proceedings where: (1) both proceedings involve the same parties or their privies; (2) the issue was actually litigated and determined in the first proceeding; (3) the determination was essential to the judgment in the first proceeding; and (4) the party against whom the doctrine is asserted had a full opportunity to litigate the issue in question. Swain, 251 Ga. App. at 113. Compare Allen v. Santana, 303 Ga. App. 844, 847 (1) (695 SE2d 314) (2010) (collateral estoppel did not apply where issue deemed not essential to first judgment). Applying these requirements, Georgia courts have repeatedly held that questions of fact ruled upon by an administrative body are thereafter precluded from relitigation in civil suits by the doctrines of res judicata and collateral estoppel, see Jordan, supra at 342; Blackwell, supra at 234.”

Although instructive, Mallory was unable to show that the State had a full opportunity to litigate the issue in question as part of the administrative proceeding. For that reason, his argument failed.